Unless you work for the banks, one would have already seen the consequences of the first heist the ROIL did when they raised their rates prior to April 19th 2010 – a lot of consumers (no stats found; pure assumptions on my part) were “forced” to lock their rates in! This was pure gravy for the very same lending institutions who were giving us their sob story about how bad things were for them during the market disruption of a few years ago. Our proof? Record profits and lo and behold…watch out for those executive compensation!
TRUE STORY – a friend of mine who works for a lending institution overheard a senior manager brag that their bonus was equivalent to “twice an average tellers’ pay!” Absolutely insane! Guess whose hours they were cutting short during market disruption which in turn lead to service disruption and high stress levels? Certainly not upper management! So why do the good people in the banks still stay with them despite getting shafted all the time? Oh…good point…why was I with my ex for ages?
The more I look back at what the ROIL BANK heist has accomplish; the more I marvel at the beauty of resulting chain reaction! Tried shopping around for your mortgage at renewal time lately? Here is what you would be met with:
– Oh no, you cannot qualify now as we use the posted rate of 6.10% regardless of what option you choose (versus 3 year posted rates prior to rules changing)…
– Oh no, every lender has the same rules! (not really!)…
– Oh no, you cannot qualify now as 35 years is the longest amortization you can have…
– Oh no, we can only use rental income if you claim it on your taxes!
– Oh no, we cannot qualify you as the value of your house has gone down! With the recent rate hikes and rule changes, the market slowed down!
BUT…we can certainly BLEND and EXTEND your term and rate!
BUT…we can certainly renew your mortgage at the current 5 year rate with our best discount (dangerous word…see prepayment blog!)!
So sorry, consumer, you would have to stay with your current bank and guess what? You are now at the mercy of taking the rate that they are offering you!!!
Assuming TD’s report that house prices will go down over the next year or so, the ROIL has bet “all in” that it will be able to headlock its customers to a higher margin! IF the market is truly as competitive as BMO’s John Turner suggests it to be, there should be some aggressive lenders out there that should be able to take advantage of ROIL’s greed! The question is – can any lender see this opportunity or do they only march to the same lender beat? Time will tell…
The CIBC survey came out the same day as a new report from Royal Bank of Canada that shows affordability eroded in the first quarter. “Looking ahead, further erosion in affordability is likely to take place in Canada in the coming 12 to 18 months,” said the report, written by Robert Hogue, senior economist with the bank.
WOW…this is nastier than divorcing you skanky miserable three timing ex wife! She continues to want to take you to the cleaners!
Th3UglyTruth is WHAT IF they really didn’t plan it to happen this way and that this was merely one of those “lucky mistakes”? The probability of this to be the case? Highly unlikely; banks are methodical in what they do! CMHC consulted ONLY the big 5 banks. Yup, you can read that again…! SO, do you really think they have your interest at heart despite their advertising?
Th3UglyTruth 